Good morning,

Markets are called to open higher this morning. This is what's happening today:

  • Chinese stocks rallied after the country’s new leadership pledged to promote domestic demand and urbanization;
  • Investors became increasingly convinced that US political leaders will reach a budget deal that avoids a major hit to the world's biggest economy;
  • Investors are also focused on U.S. economic data due for release later in the week. On Friday, U.S. nonfarm payrolls figures for November — a key gauge of employment — will be released. The figures could be distorted by the impact of superstorm Sandy;
  • Chancellor of the Exchequer George Osborne unveils his budget update today and will likely admit it could take longer than expected to slash the deficit as a result of the weaker-than-expected economy;
  • ISM and ADP data out from the US today;
  • 10-year Italian debt is yielding 4.418%, 10-year Spain is yielding 5.234% and 10-year Portuguese debt is yielding 7.446%;
  • Brent is trading at $110.07/barrel;
  • Gold is trading at $1701.97/ t oz;
  • Appls closed the session at $575.85

Despite political posturing and a deep divide on critical issues, most analysts think a deal acceptable to both President Barack Obama and congressional Republicans will be presented before the end of the year. Analysts at DBS Bank Ltd. said that "the US fiscal cliff is viewed as political theatre and not as an imminent threat to the US economy. Unlike 2010, both the White House and the Republicans have been careful in communicating that, despite the differences in opinions over how to rein in the fiscal deficit, the door is open for a compromise solution by the end of the year."

Interesting session for Netflix yesterday which closed the session 14% up. Netflix concluded a deal with Walt Disney to stream new releases, including those from Pixar and Marvel. This deal signals that online viewing has become mainstream and poses a major threat to traditional pay TV. Starting in 2016, Netflix gains exclusive US TV rights to movies from Disney, the world’s largest entertainment company. This give Netflix video service new films in a time frame historically reserved for premium channels like Liberty Media Corp.’s Starz, as soon as seven months after theaters.

Samsung is trading at an all time high after the Group promoted Lee Jae-yong, the only son of Samsung Electronics Co. Chairman Lee Kun-hee, to vice chairman, a move that is seen as accelerating the third-generation management at South Korea's biggest family-owned conglomerate.

Facebook will be added to the Nasdaq 100 stock index ahead of the open of trade on December 12, roughly seven months after the social networking giant's initial public offering, the Nasdaq stock exchange said in a statement. In a widely expected move, Facebook will replace tech services firm Infosys, which is switching its listing to the NYSE. While Facebook's total market valuation is close to $60 billion, roughly half of its shares outstanding are privately held. At nearly $30 billion, the value of its publicly floated shares will put the social networking firm among the top 25 most valuable companies on the NASDAQ 100 index.

In the UK, Osborne will present the budget for 2013. He already warned that economic recovery will take longer than hoped but insisted that abandoning the government's tough deficit-slashing austerity measures would be catastrophic amid the ongoing eurozone debt crisis. The UK has two targets, one is to get debt share falling as a share of national income by 2015/16 and the other to balance the current budget.

Australia’s economy slowed in Q312 on the weakest consumer demand in 2.5 years and tighter government spending, validating the central bank’s decision to cut interest rates. Q312 GDP advanced 3.1% from a year earlier after a revised 3.8% expansion in the April-June period. Growth was 0.5% from the previous three months, when the quarterly gain was 0.6%.

Stock to watch: Allstate Corporation

Deutsche Bank Comments: We believe that shares of Allstate have begun to emerge from their trough, and its current outlook implies some relief from the previously unparalleled weather losses in terms of frequency, severity and persistency. While we are not forecasting an end to catastrophe losses hurting EPS, we believe rate actions and coastal non-renewals have done much to improve Allstate's position. There are several catalysts that could cause the stock to rise: a continuation of the current moderate weather trends, continued increases in homeowners' rates reacting to prior weather losses, and an improvement in the auto policy growth trend following the acquisition of Esurance. Additionally, we believe Allstate's valuation had been restrained by concerns over its asset portfolio, but recent de-risking suggests that this multiple compression may no longer be as applicable. Nonetheless, over any longer-term period, only book value growth and earnings consistency are likely to increase the stock price. Buy

For further information on Allstate Corporation or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli